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ELRCPartially AllowedCause Number 206 of 2014· [2016] KEELRC 1610 (KLR)

Richard Masasi Okwoyo, Clifford Masongo Onchaga, Charles Matwete Begi & Naftal Momanyi Orando v Coastech Limited & Composol Limited (Cause 206 of 2014) [2016] KEELRC 1610 (KLR)

Industrial Court of Kenya
4 March 2016
JRJames Rika
542 words in judgment
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The bottom line

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Kenya's Industrial Court awarded four workers Kshs. 528,500 in unpaid dues after their employer ignored the case, and held a successor company equally liable.

What this practically means

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Executive summary

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Four claimants sued Coastech Limited and Composol Limited before the Industrial Court at Mombasa seeking terminal dues and damages. They had been employed by the 1st Respondent in various capacities; the 2nd Respondent was a successor employer registered in 2012 by the 1st Respondent's directors. All four resigned in September 2013 after the employer failed to pay their monthly salaries. They claimed salary arrears, severance pay and annual leave pay totalling Kshs. 528,500, plus damages, costs and any other suitable relief. The Respondents were served through substituted service but did not enter appearance, file any response or participate. The Claimants' Advocate adopted the Statement of Claim, witness statements, documents and submissions on record. The Court found it undisputed that the Claimants were employed by the two Respondent Companies, and that the Respondents' letters in response to demand letters acknowledged the employment and admitted owing 'some salary arrears', with assurances of amicable settlement through the Labour Office that never materialised. The unchallenged material and partial admissions satisfied the Court that the claims were established; the item labelled 'severance pay' was amended to read 'service pay'. The damages claim was declined as not established. The Court ordered payment of Kshs. 528,500 within 30 days, attracting interest at 14% per annum if unpaid after that period, and costs to the Claimants. The Award was dated and delivered at Mombasa on 4th March 2016 by James Rika, Judge.

Key legal issues

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01

Establishment of the claims for salary arrears, severance/service pay and annual leave pay

Holding

The claims were satisfactorily established; the item labelled severance pay was amended to read service pay

Reasoning

The Respondents were served through substituted service but did not enter appearance, file a response or participate. The Claimants' material was therefore unchallenged. The Respondents' letters in reply to demand letters conceded employment and admitted owing 'some salary arrears'. On that uncontroverted evidence the Court found the claims established, amending the mislabelled severance pay to service pay.

p. 2
02

Claim for damages

Holding

Declined as not established

Reasoning

Beyond the quantified dues of salary arrears, service pay and annual leave pay, the Claimants sought damages without proving any basis for them. The Court found the damages claim unsubstantiated and refused it, awarding only the particularized sums with interest in default.

p. 2

Legal principles established

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  • Unchallenged evidence, including letters from the Respondents partially admitting the claims, suffices to establish employment claims on a default of appearance
  • Where an employer's directors register a successor company, that successor is liable as employer for the employees' terminal dues

Court orders

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  1. 1.The Claimants shall be paid by the Respondents the sums particularized in paragraph 1 of the Award
  2. 2.The total amount of Kshs. 528,500 to be paid to the Claimants within 30 days of delivery of the Award
  3. 3.The principal amount to attract interest at 14% p.a. from the date of delivery of the Award if unpaid after 30 days
  4. 4.Costs to the Claimants

Authorities

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Legislation

  • Industrial Court (Procedure) Rules 2010Rule 27(1)(a)
Jurisdiction invoked
Industrial Court jurisdiction over employment disputes; Award made under Rule 27(1)(a) of the Industrial Court (Procedure) Rules 2010

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Richard Masasi Okwoyo, Clifford Masongo Onchaga, Charles Matwete Begi & Naftal Momanyi Orando v Coastech Limited & Composol Limited (Cause 206 of 2014) [2016] KEELRC 1610 (KLR)", Case Analysis (2016). Cause Number 206 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1610/eng@2016-03-04

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.